Mortgage Bonds are lower and drifting down towards the lower end of sideways trading range.

Stock prices opened higher, but took a hit this morning after June New Home Sales fell 8.1% from May to an annual rate of 406K, below the 475K expected. The housing numbers have been erratic as the sector continues to jump over hurdles.

The Labor Department reported that Weekly Initial Jobless Claims fell by 19K in the latest week to an 8-year low of 284K, below the 308K expected. The four-week average of claims, which irons out seasonal abnormalities, fell 7,250 to 302K, the lowest level since May 2007. Claims are typically a leading indicator on the health of the labor market. As do Claims go so does the Job markethence, we should expect continued improvement in the labor market.

After a Taiwan flight with 47 passengers crashed on Wednesday due to bad weather, this morning Air Algeria Fl 5017 carrying 116 people vanished after changing its flight course due to bad weather. Our thoughts and prayers are with the families and friends of these victims.

Technically, the 4% coupon opened lower beneath support supplied by the 25 and 50-day Moving Averages, level that now become resistance once again. Locking short-term as prices could dip further down to test support may be wise. Otherwise, if you have some time and patience consider floating. The poor housing reading may give Bond relief throughout the day.